Market watchers expected that the Chinese firm's new investment, if made, will further fuel competition in the chip industry, which has suffered from the game of chicken in which firms try to absorb losses long enough for their rivals to buckle.

Over the past years, the Chinese government-affiliated private equity firm funded by Tsinghua University purchased Chinese mobile chipmakers Spreadtrum and TRA Microelectronics.

The company's efforts to get into the top echelon of the world's chip sector include stake purchases in Chinese mobile chipmaker Spreadtrum and TRA Microelectronics, Taiwanese chip companies SPIL and ChipMOS and Taiwanese chip-packaging company PowerTech.

It also has begun eueing takeovers of global chipmaking powerhouses, including Micron Technology and Western Digital.

The acquisition plan for Micron Technology fell through reportedly due to the intervention of the US authorities, and the Chinese firm has also scrapped the takeover plan of Western Digital, concerned that the US government will block the acquisition deal.

"The latest investment plan is in line with the Chinese government's efforts to wean itself off foreign technology," said an industry source.

Chinese electronics and smartphone manufacturers have heavily relied on foreign chip companies like Samsung Electronics and SK hynix -- the two powerhouses in the NAND Flash and DRAM chip sectors.

Coupled with the rising Chinese display sector, Unigroup's investment will also serve as impetus to the Chinese semiconductor industry, as well as its smartphone industry.

Global chip companies have competitively ramped up their production capacities of memory chips, leading to falling chip prices.

The Chinese push in the display and semiconductor sectors will likely worry Samsung, which is forecast to post disappointing earnings for the first quarter of this year.

Some local investment firms anticipated that the operating profit of Samsung would decrease to between 4.9 trillion won ($4.19 billion) and 5 trillion won in the first quarter due to low prices of DRAM and stiff market competition.

The estimated profit figure is a record low since the third quarter of 2014, when its operating profit came in at 4.1 trillion won.

With the grim outlook for the chip sector, the stock price of SK hynix has continued to fall for weeks.

"SK hynix needs to make advances in chip technologies, such as 3-D NAND chips and controllers to cushion the decreasing profit margin in the first quarter of this year," Lee Seung-woo, an analyst from IBK Investment Securities, said in an investment report.

The combined market share of the two Korean companies stood at 74 per cent and 43.7 per cent in the world's DRAM and NAND Flash chip industries, respectively, as of the fourth quarter last year, according to market reports.